The United Nations Relief and Works Agency for Palestinian Refugees (UNRWA) has vowed to continue its work after Israeli Prime Minister Benjamin Netanyahu called for it to be scrapped.

In a series of tweets on Sunday evening, a spokesperson for the UN agency said it would continue providing help to Palestinian refugees until the international community comes up with a solution for their plight.

"UNRWA is assigned by the General Assembly to continue its services until a fair solution to Palestinian refugees issue is reached," UNRWA official Sami Mushasha noted.

His comments came shortly after Netanyahu called for the agency to be scrapped, accusing it of helping "fictitious refugees.

"UNRWA is an organisation that perpetuates the Palestinian refugee problem and the narrative of the right-of-return, as it were, in order to eliminate the State of Israel," the Israeli leader said, adding the development agency needed "to pass from the world".

The agency plays a significant role in supporting Palestinian refugees with access to education, healthcare, social services and employment in the occupied Palestinian territories and in neighbouring states.

Hundreds of thousands of Palestinians were expelled from their homes in historic Palestine by Zionist militias during the 1948 Arab-Israeli war and later by the Israeli army during the 1967 war.

Today, those refugees and their descendants total more than five million people.

Netanyahu's comments come less than a week after US President Donald Trump threatened to cut off American funding to the Palestinian Authority (PA) for not showing enough "appreciation or respect" towards the United States.

"With the Palestinians no longer willing to talk peace, why should we make any of these massive future payments to them?" Trump asked.

Analysts have warned that if the US leader follows through with the threat, and the withdrawal of aid includes funds earmarked for UNRWA, there would be a big strain on the PA to cover those costs.